|Author(s):||Hammack, David C.|
EH.NET REVIEW (April 1999)
Making the Nonprofit Sector in the United States: A Reader. Edited with
Introductions by David C. Hammack. Bloomington, Indiana: Indiana University
Press, 1998. xix, 504 pages. $39.95 (cloth), ISBN 0-253-33489-6.
Reviewed for H-Business by Milton Goldin, National Coalition of Independent
Since World War II, the nonprofit sector’s growth has been astonishing, by any
measure. At the beginning of the 20th century, America had just eight
foundations; in 1999, there are over 41,000, with the overwhelming majority
created after 1945. Even the Internal Revenue Service cannot provide the exact
number of today’s nonprofits. Possibly it exceeds two million, including
churches, synagogues, and local chapters of national organizations.
Sorting out how and why all this happened, whose interests these developments
served, and the outlooks of the great American philanthropists attracts the
attention of more and more scholars. They have no easy task because the
nonprofit world is enormously varied and complex. To a large extent, the
scholars’ own el eemosynary experiences are with foundation program officers,
in connection with grant applications for research projects. But most
philanthropic transactions still take place the way they did at the beginning
of the 20th century, with someone personally asking someone else for a
donation to finance a cause for communal betterment.
During my own forty years plus as a development professional, I have often
wondered how it is that pronouncements about charitable giving made at
institutions of higher learning so seldom seem applicable to what we actually
do. The reason, of course, is that what is pronounced is only infrequently
applicable to such places as Borough Park in Brooklyn, Ivy League universities,
and suburban Scarsdale, in New York’s Westchester County.
According to the publicity release accompanying the review copy of Making
the Nonprofit Sector, Hammack, who is currently on the staff of
Case-Western Reserve University, has had a long and distinguished teaching
career. Evidently, however, he ne ver worked at a nonprofit. What is
surprising, given the book’s title, is how much more it tells us about how the
system worked and currently works than about the theories that undergird it.
Hammack includes forty-one documents and essays by “men and women who have
taken part in the effort to define America and the American dream. . . .”
But his book tells us little about the philosophies of the two men who defined
modern philanthropy, Andrew Carnegie and John D. Rockefeller. Both had earlier
modern corporation, and neither thought that charity, like industry, could
function on a piecemeal basis in an advanced industrial society.
Clearly, their thinking is of critical importance to “Making the Nonprofit
Sector.” But in this connection, neither of two seminal articles, nor sections
thereof, by Carnegie (“Wealth”  and “The Best Fields for Philanthropy” )
are included. Arguably, these are the most literate and powerful attempts ever
written to explain relationships between laissez-faire capitalism, charity,
and Social Darwinism, of which Carnegie was an exponent. Despite his unwavering
dedication to the proposition that the fittest survive, Carnegie could never be
certain that fit societies survive. He argues that capitalists must spend their
fortunes for the public good. If they fail to do so, consequences may include
serious social unrest. And such unrest could lead to the loss of fortunes.
Carnegie’s articles inspired a torrent of angry responses from clerics and
social activists, which is why it is impossible to understand the Social
Gospel and opposition by Progressives to benefactions by the very rich
without taking into account the polemics of such clerics as the Reverend
William Jewett Tucker. For Tucker, the problem posed by great wealth was the
fact of its accumulation in the hands of a few, not of how to dispose of it
after it was accumulated. Charitable organizations, financed and organized
by men whose wealth was unimaginable before the Civil War, could be, to
like Tucker, nothing more than a means of social control through which the rich
hoodwinked the poor.
Unfortunately, not only is there nothing by Tucker included in the book,
but on Rockefeller giving, Hammack offers only Frederick T. Gates’s
the Tenth Anniversary of the Rockefeller Institute, 1911″ (pp.
320-328). This selection helps us understand rationales that led to the
founding of the Institute, a forerunner of Rockefeller University. But it does
not suggest another subject of even greater importance than health care in
Rockefeller thinking, around 1911.
Rockefeller and his son, John D., Jr., were deeply concerned about the same
reaction that had troubled Carnegie — growing public sentiment against the
very rich. The resentment would shortly spill over into Congress. In 1912,
a Presidential Commission on Industrial Relations, headed by Frank P.
Walsh, opened hearings on the “general conditions of labor in the United
States.” The Commission’s more immediate mandate would soon become exploring
possible connections between Rockefeller holdings in the Colorado Fuel and Iron
Company, the Rockefeller Foundation, and a confrontation between members of the
National Guard armed with machine guns, and strikers, at one of the company’s
The running battle that then developed between foundations and Congress came to
a head in 1969, when the redoubtable Representative Wright Patman
(D-Texas), simultaneously chairman of both the House Subcommittee on Small
Business and the House Banking and Currency Committee, launched what turned
out to be the most exhaustive Congressional probe of foundations ever
undertaken. At once, and rightly, foundations feared the havoc Patman might
wreak , based on his clearly negative feelings toward trustees of
foundations and directors of Eastern banks: “You can’t tell Brand X from
Brand Y, they’re the same people,” he declared.
Patman might have ended the development of foundations as tax shelters. He
asked, “How can the Treasury
Department possibly justify continuing to wring heavy taxes out of the farmer,
the worker, and the small businessman,
knowing that people of large means are building one foundation after another. .
. ?” As it developed, however, foundations had the political power to
withstand Patman’s mighty assault. The Reform Act of 1969, mainly his doing,
came nowhere near accomplishing what he wanted, which was for the Secretary of
the Treasury “to declare an immediate moratorium on granting exemptions to
foundat ions and charitable trusts. . . .”
Hammack devotes little space to the Patman episode and includes none of
Patman’s statements. Nor does he include responses to Patman by foundation
spokesmen. Yet, such items relate philanthropy to Progressivism, to what
Carnegie and Rockefeller feared, and, not least, to the “American dream.” On
the plus side, the book provides useful information on many individuals and
institutions. It lacks an index, however, making it difficult to easily locate
. North American Review, v. 141 (June 1889), pp. 653-664.
. North American Review, v. 141 (December 1889), pp. 682-698.
. See especially, Tucker, William Jewett, “The Gospel of Wealth,”
Andover Review, v.15 (June, 1891), 631-645.
. See “Tax-Exempt Foundations and Charitable Trusts: Their Impact on the
Economy,” Subcommittee Chairman’s Report to Subcommittee No. 1, Select
Committee on Small Business, House of Representatives. The items included
are dated December 31, 1962; October 16
, 1963; March 20, 1964, December 21,
1966; April 28, 1967, March 26, 1968, June 30, 1969, and August 1972.
Hereafter referred to as Patman Reports.
. See Andrews, F. Emerson, Patman and Foundations: Review and
Assessment. Occasional Papers: Number T hree. New York: Foundation Center,
. Joseph C. Goulden, The Money Givers. New York: Random House, 1971,
. Patman Reports, December 31, 1962, p. 2.
. Patman Reports, December 31, 1962, p. 2.
|Subject(s):||Social and Cultural History, including Race, Ethnicity and Gender|
|Geographic Area(s):||North America|
|Time Period(s):||20th Century: WWII and post-WWII|